Arkansas · State law

Arkansas Nonprofit Corporation Act of 1963

This is the corporate code for Arkansas associations incorporated before January 1, 1994 that never elected into the newer act — and it contains something the 1993 Act does not: a broad right for any member to inspect all books and records for any proper purpose. The same chapter also carries Arkansas’s Revised Uniform Unincorporated Nonprofit Association Act, which governs HOAs that were never incorporated at all. The full chapter text, hosted for reference, with a plain-language guide for homeowners.

A.C.A. A.C.A. Tit. 4 · Ch. 28 §§ 4-28-101 – 4-28-636 94 Sections

What this means for homeowners

Chapter 28 of Title 4 is a mixed chapter, and only two parts of it matter to an Arkansas homeowner. Subchapter 2 carries the Arkansas Nonprofit Corporation Act — §§ 4-28-201 to 4-28-206 and 4-28-209 to 4-28-224 by its own terms (§ 4-28-201), commonly called the 1963 Act to tell it apart from the 1993 one — the corporate code for older associations. Subchapter 6 is the Revised Uniform Unincorporated Nonprofit Association Act, which governs an association that was never incorporated. The rest of the chapter — charitable-solicitation registration at §§ 4-28-401 to 4-28-418, and the merger provisions at §§ 4-28-301 to 4-28-309 — is hosted below for completeness but rarely touches a community association.

Which corporate act governs your association?

It is a question of date, and it has real consequences. Under § 4-33-1701, the Nonprofit Corporation Act of 1993 applies to corporations incorporated on or after January 1, 1994. Anything incorporated before then “shall continue to be governed by preexisting law” — this chapter — unless it amended its articles to elect into the 1993 Act, an election the statute makes irrevocable.

Incorporated 1994 or later → the 1993 Act governs.
Incorporated before 1994 and never elected in → this chapter governs.
Never incorporated at all → Subchapter 6, the unincorporated association act, governs.

There is one further wrinkle at the very old end. Section 4-28-204(a) says this subchapter “shall in no way affect any nonprofit corporation chartered under and in accordance with the laws of this state existing prior to March 7, 1963” — though such a corporation may file its original charter order with the Secretary of State and be recognized on the same footing as one formed under this subchapter (§ 4-28-204(b)). Check your incorporation date and any amendments through the Arkansas Secretary of State.

The older act gives you a better records right — and that is not a typo

This is the most useful thing on the page, and it runs opposite to what most people would assume. The 1993 Act contains no records-keeping section and no general right for a member to inspect the association’s books — only a narrow right, at § 4-33-720, to inspect and copy the membership list around a members’ meeting, and even that may be limited or abolished by a religious corporation’s articles or bylaws (§ 4-33-720(e)). This 1963 chapter goes very much further.

Section 4-28-218 requires every corporation to keep correct and complete books and records of account, to record all receipts and expenditures according to accepted accounting principles, to keep a record of the proceedings of its members, board of directors, and committees, and to maintain a record of the names and addresses of members entitled to vote at its principal office or place of business. Then comes subsection (e), in one sentence:

“All books and records of a corporation may be inspected by any member for any proper purpose at any reasonable time.” (§ 4-28-218(e))

No holding period, no membership threshold, no five-day written demand, no list of exempt categories. It is a broad right, qualified only by proper purpose and reasonable time. If your association is an older Arkansas nonprofit that never elected into the 1993 Act, this is the provision to cite when you ask to see the books — and it is a concrete reason to find out your incorporation date before assuming you have no access rights.

How an older association is governed

Board of at least three, elected by the whole membership. The first directors are named in the articles; after that the board is elected by vote of the entire membership. The number is fixed by the articles but may not be fewer than three (§ 4-28-211(a), (b)).
Director terms are bounded. For a perpetually existing corporation, terms must be not less than one year nor more than six; for a corporation of limited duration, no more than one-third of its stated period. Staggered terms are allowed (§ 4-28-211(c), (d)).
One member, one vote for directors. Each member gets one vote in the election of the board, and one vote for each membership where a single entity holds more than one. On other matters the voting right is whatever the articles or bylaws provide (§ 4-28-212(a), (b)).
Proxies are allowed by default on any matter subject to a member vote — unless the articles or bylaws require votes to be cast in person at a meeting (§ 4-28-212(c)).
Membership fees get a paper trail. If a membership fee is collected, the corporation must issue a serially numbered certificate, and its records must show the amount collected for each one (§ 4-28-210(b)).
Reasonable compensation is allowed to members, directors or officers for services rendered, and expenses may be reimbursed on a receipt or other proper document (§ 4-28-215).

Two hard prohibitions are worth knowing. The corporation cannot issue shares of stock, and no dividend may be paid and no part of its income distributed to members, directors or officers (§ 4-28-219). And no loans may be made to directors or officers — directors who vote for or assent to such a loan, and officers who participate in making it, are jointly and severally liable to the corporation for the amount until it is repaid (§ 4-28-220).

If your association was never incorporated

Plenty of Arkansas neighbourhood associations operate without ever having filed articles. Subchapter 6 covers them, and its central move is that an unincorporated nonprofit association is a legal entity in its own right (§ 4-28-605).

Members are not personally on the hook. A debt, obligation or liability of the association — in contract, tort or otherwise — is solely the association’s, and does not become a member’s or manager’s liability merely because they acted as one (§ 4-28-608(a)). That does not immunise anyone for their own conduct (§ 4-28-608(b)).
“Governing principles” can be unwritten. The rules are the association’s agreements — “whether oral, in a record, or implied from its established practices” — and “established practices” means how it has actually operated, without material change, over the most recent five years of its existence — or its entire existence, if it has existed for less than five (§ 4-28-602(1), (2)). In an association with no written documents, what it has consistently done becomes the rule.
Default voting. Unless the governing principles say otherwise, approval requires a majority of the votes cast at a meeting and each member has one vote per matter. Notice and quorum are whatever the governing principles provide (§ 4-28-617).
Expulsion follows the governing principles — and if there are none applicable, a member may be suspended, dismissed or expelled only by a vote of the members. Nobody can be made a member without consent, and — unless the governing principles provide otherwise — being expelled does not relieve a member of unpaid capital contributions, dues, assessments, fees or other obligations incurred before the expulsion (§ 4-28-619).
An information right, with limits. On reasonable notice a member may inspect and copy, during regular operating hours at a reasonable location, any record about the association’s activities, financial condition and other circumstances — to the extent material to that member’s rights and duties under the governing principles. The association may impose reasonable confidentiality restrictions and charge reasonable copying costs limited to labour and materials. Former members keep access to records from their own period of membership if they seek it in good faith (§ 4-28-625).
No distributions to members or managers, subject to the permitted-payment rules for compensation and reimbursement (§ 4-28-626).

One provision that applies whatever form your association takes

Section 4-28-105 sits in the chapter’s general provisions and is worth knowing. A nonprofit organization may sue and be sued in its own name in court, before an agency, or in arbitration or mediation. It may also assert a claim on behalf of its members where at least one member would have standing individually, the interests are germane to the organization’s purpose, and neither the claim nor the relief requires an individual member’s participation. That is the mechanism by which an association can litigate a common problem — a defective common area, say — without every owner joining as a plaintiff.

Section 4-28-222 separately sets out the grounds for involuntary dissolution of a corporation under this subchapter — fraud in procuring the articles, among others. Note who may bring it: the action is filed by the Attorney General in Pulaski County Circuit Court, or by the prosecuting attorney in the county where the corporation is domiciled. It is not a remedy an individual member can invoke.

One duty that reaches across from the newer act

Do not miss this one, because it is a live compliance trap for exactly the older associations this page addresses. Section 4-33-131 sits in the 1993 Act but by its own terms reaches “nonprofit corporation organized under § 4-28-101 et seq.” — that is, corporations under this chapter. It requires an annual disclosure statement filed with the Secretary of State by August 1, giving the corporate name, jurisdiction, registered agent, principal office, principal officers and directors. Miss it, and if nothing is filed by January 31 the Secretary of State proclaims the charter not current and the corporation delinquent (§ 4-33-131(b)). Filing the previous four delinquent years reinstates it retroactively (§ 4-33-131(c)) — but reinstatement is barred after five years, at which point the corporation is statutorily dissolved and its name becomes available to anyone else (§ 4-33-131(d)). If your association has gone quiet, check its status on the Secretary of State registry before anything else.

What this chapter does not give you

As with the rest of Arkansas law, be clear about the limits. Nothing in this chapter caps assessment increases, requires open board meetings, sets an architectural-review or fining procedure, or creates a state agency that supervises community associations. Its subject is corporate existence and internal governance — not the substantive relationship between an association and a homeowner. That relationship is governed by your recorded declaration or bill of assurance, and — if you live in a condominium — by the Horizontal Property Act.

How it fits with Arkansas’s other community laws

This chapter and the Nonprofit Corporation Act of 1993 are alternatives, not layers — which one applies turns on your association’s incorporation date and whether it ever elected in. Condominium questions run through the Horizontal Property Act. Housing-discrimination questions fall under the Arkansas Civil Rights Act and Fair Housing Act and the federal Fair Housing Act. And if a third-party collector is pursuing your assessments, Arkansas has its own Fair Debt Collection Practices Act with a private right of action. Return to the Arkansas HOA laws hub for the full set.

Source. Reproduced from the Arkansas Code of 1987 Annotated, unofficially updated by LexisNexis through the legislation of the First Extraordinary Session, 2026, A.C.A. § 4-28-201 et seq. (the “Arkansas Nonprofit Corporation Act of 1963”), as published by LexisNexis for the State of Arkansas. Provided for reference and convenience; it may not reflect the most recent amendments, so always confirm the current text against the official source.

Contents · 94 sections ▾

4-28-101 Fairs and associations of public nature.
4-28-102 Religious, literary, benevolent, etc., corporations — Fees.
4-28-103 Statutory life insurance beneficiaries.
4-28-104 Audit of nonprofit organization.
4-28-105 Capacity to assert and defend — Standing.
4-28-201 Title.
4-28-202 Definitions.
4-28-203 Applicability of subchapter.
4-28-204 Effect on preexisting corporations.
4-28-205 Lawful purposes.
4-28-206 Articles of incorporation generally.
4-28-207 Charitable, religious, etc., organizations — Amendment of articles of incorporation by operation of law.
4-28-208 Private foundations — Amendment of articles of incorporation by operation of law.
4-28-209 Powers.
4-28-210 Members.
4-28-211 Board of directors.
4-28-212 Voting.
4-28-213 Officers.
4-28-214 Registered agent — Service of process.
4-28-215 Compensation and reimbursement to members, directors, officers, etc.
4-28-216 Powers of Secretary of State.
4-28-217 Rules by state agencies applicable.
4-28-218 Books and accounting records.
4-28-219 Shares of stock and dividends prohibited.
4-28-220 Loans to directors and officers prohibited.
4-28-221 Admission of foreign corporation.
4-28-222 Involuntary dissolution.
4-28-223 Fees to be paid to Secretary of State.
4-28-224 Corporation's acceptance of votes.
4-28-225 Conversion to public water authority.
4-28-301 Definition.
4-28-302 Domestic corporations — Merger pursuant to plan.
4-28-303 Domestic corporations — Consolidation pursuant to plan.
4-28-304 Domestic corporations — Adoption of plan of merger or consolidation — Abandonment.
4-28-305 Domestic corporations — Articles of merger or consolidation.
4-28-306 Domestic corporations — Certificate of merger or consolidation — Merger or consolidation effected upon issuance.
4-28-307 Domestic corporations — Effect of merger or consolidation.
4-28-308 Merger or consolidation of foreign with domestic corporations.
4-28-309 Continuation of prior corporate existence for limited purpose.
4-28-401 Definitions.
4-28-402 Registration of charitable organizations prior to solicitation.
4-28-403 Annual financial reports and fiscal records.
4-28-404 Charitable organizations exempted from registration and financial disclosure requirements.
4-28-405 Charitable organization — Filing of contracts.
4-28-406 Fund-raising counsel — Registration — Fees.
4-28-407 Paid solicitors — Registration, fees, and bond — Filing of contracts — Solicitation notice — Contract requirements — Prohibited practices — Records — Deposit of funds.
4-28-408 Commercial coventurers — Filing of contracts — Terms — Accounting — Disclosures required in advertising.
4-28-409 Disclosures.
4-28-410 Documents.
4-28-411 Professional telemarketers — Registration and renewal.
4-28-412 Prohibited acts.
4-28-413 Nonresident organization — Service of process.
4-28-414 City ordinances provisionally authorized.
4-28-415 Disposition of fees.
4-28-416 Violation of the Deceptive Trade Practices Act.
4-28-417 Access to records.
4-28-418 Limitations on regulation by a public agency.
4-28-501 Repealed
4-28-601 Short title.
4-28-602 Definitions.
4-28-603 Relation to other law.
4-28-604 Governing law.
4-28-605 Legal entity; Perpetual existence; Powers.
4-28-606 Ownership and transfer of property.
4-28-607 Statement of authority as to real property.
4-28-608 Liability.
4-28-609 Assertion and defense of claims.
4-28-610 Effect of judgment or order.
4-28-611 Appointment of agent to receive service of process.
4-28-612 Service of process.
4-28-613 Action or proceeding not abated by change.
4-28-614 Venue.
4-28-615 Member not agent.
4-28-616 Approval by members.
4-28-617 Meetings of members; Voting, notice, and quorum requirements.
4-28-618 Duties of member.
4-28-619 Admission, suspension, dismissal, or expulsion of members.
4-28-620 Member's resignation.
4-28-621 Membership interest not transferable.
4-28-622 Selection of managers; Management rights of managers.
4-28-623 Duties of managers.
4-28-624 Notice and quorum requirements for meetings of managers.
4-28-625 Right of member or manager to information.
4-28-626 Distributions prohibited; Compensation and other permitted payments.
4-28-627 Reimbursement; Indemnification; Advancement of expenses.
4-28-628 Dissolution.
4-28-629 Winding up and termination.
4-28-630 Mergers.
4-28-631 Transition concerning real and personal property.
4-28-632 Uniformity of application and construction.
4-28-633 Relation to Electronic Signatures in Global and National Commerce Act.
4-28-634 Savings clause.
4-28-635 Reserved
4-28-636 Effective date.

§ 4-28-101 Fairs and associations of public nature.

(a) Agricultural and mechanical fair associations and other associations of a public nature and designed to promote the public good may be constituted bodies politic and corporate in the manner provided by law for business corporations, and the capital stock may be divided and held in shares of two dollars ($2.00) each.

(b) No profits or dividends shall ever be declared or paid under this section; however, dividends may be paid to the amount of money paid in by the stockholders on their respective shares.

(c) This section shall not be construed to prohibit the associations from being chartered and incorporated with the powers and privileges and in the manner provided by law.

§ 4-28-102 Religious, literary, benevolent, etc., corporations — Fees.

There shall be allowed and collected by the Secretary of State, and accounted for by him or her to the State Treasury in the same manner as all other fees are or shall be directed to be accounted for by state officers, a fee for receiving each draft of articles, or charter, of a private incorporation created for religious, literary, benevolent, or scientific purposes and not for purposes of pecuniary profit, directly or indirectly, of two dollars and fifty cents ($2.50).

§ 4-28-103 Statutory life insurance beneficiaries.

(a) For the purposes of this section, “public funds” means all federal, state, county, municipal, or other funds received from any taxing unit.

(b)(1) Nonprofit corporations shall not use public funds to purchase key-man life insurance as a form of deferred compensation.

(2) The insured employee shall not receive any cash values or other benefits from the purchase of key- man life insurance with public funds.

(3) Nonprofit corporations purchasing key-man life insurance with public funds shall not transfer ownership or any other rights under such policies directly or indirectly to the insured.

(c) Nonprofit corporations violating subsection (b) of this section shall not be eligible to receive any public funds for a period of two (2) years from the date the violations are discovered.

(d)(1)

(A) Notwithstanding any other law or rule to the contrary, any religious, educational, charitable, or benevolent institution, organization, corporation, association, or trust, including, but not limited to, charitable remainder trusts, may be named beneficiary or owner, or both, of the policy or contract by any applicant for insurance upon his or her own life in any policy of life insurance issued by any life insurance company authorized to do business in this state or in the state of domicile of the applicant for insurance.

(B) The applicant for insurance shall be deemed to have an unlimited insurable interest in his or her own life and is entitled to name any of the institutions as beneficiary of the insurance, and the beneficiaries or owners, or both, shall have the right to receive all death benefits provided for by the policy and to exercise the rights of ownership if granted ownership.

(2) As to any life insurance policies heretofore issued by insurers naming any of the aforementioned institutions as beneficiaries or owners, or both, if the applicant for insurance was also the insured, the beneficiaries or owners, or both, shall be entitled to receive all death benefits provided by the policy and to exercise the rights of ownership if granted ownership.

§ 4-28-104 Audit of nonprofit organization.

(a) For purposes of this section:

(1) “Nonprofit organization” means an organization exempt from taxation under § 26 U.S.C. 501(c)(3); and

(2) “State financial assistance” means all state funds given, granted, or disbursed to a nonprofit organization pursuant to appropriation laws to provide services for the citizens of this state or for capital projects.

(b)(1) Any nonprofit organization receiving state financial assistance shall be subject to audit of its receipt and expenditure of state financial assistance by Arkansas Legislative Audit.

(2) An audit shall be conducted by Arkansas Legislative Audit only after approval by the Legislative Joint Auditing Committee.

§ 4-28-105 Capacity to assert and defend — Standing.

(a) A nonprofit organization may, in its own name, institute, defend, intervene, or participate in a judicial, administrative, or other governmental proceeding or in an arbitration, mediation, or any other form of alternative dispute resolution.

(b) A nonprofit organization may, in its own name, assert a claim on behalf of its members if:

(1) One (1) or more members of the nonprofit organization have standing to assert a claim in their own rights;

(2) The interests the nonprofit organization seeks to protect are germane to its purpose; and

(3) Neither the claim asserted nor the relief requested requires the participation of a member.

§ 4-28-201 Title.

Sections 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224 shall be known as the “Arkansas Nonprofit Corporation Act”.

§ 4-28-202 Definitions.

As used in §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, unless the context otherwise requires:

(1) “Board of directors” means the group of persons vested with the management of the affairs of the corporation;

(2) “Corporation” means a domestic corporation not for profit subject to the provisions of §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224;

(3) “Foreign corporation” means a corporation not for profit organized under laws other than the laws of this state; and

(4) “Not-for-profit corporation” means a corporation no part of the income of which is distributable to its members, directors, or officers. Sections 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224 shall apply only to corporations organized under the laws of this state authorizing organization of nonprofit corporations.

§ 4-28-203 Applicability of subchapter.

(a) The provisions of §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224 relating to domestic corporations shall apply to:

(1) All corporations organized hereunder; and

(2) All not-for-profit corporations heretofore organized under any act hereby repealed, for the purposes for which a corporation might be organized under §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224.

(b) The provisions of §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224 relating to foreign corporations shall apply to all foreign not-for-profit corporations conducting affairs in this state for purposes for which a corporation might be organized under §§ 4-28-201 — 4-28-206 and 4-28-209 — 4- 28-224. However, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224 shall not apply to any corporation whose membership is composed of corporations which file annual statements with a department or agency of this or some other state.

§ 4-28-204 Effect on preexisting corporations.

(a) The provisions of §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224 shall in no way affect any nonprofit corporation chartered under and in accordance with the laws of this state existing prior to March 7, 1963.

(b) Any such nonprofit corporation organized prior to March 7, 1963, and which has not filed a copy of the order or action whereby it was granted corporate status under the then existing law may file a certified copy of the order or action from the clerk of the court wherein the authority was granted, together with a filing fee of ten dollars ($10.00), with the Secretary of State, and the filing shall evidence the incorporation and shall entitle the organization to recognition of its legal status, the same as one formed under the provisions of §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224.

§ 4-28-205 Lawful purposes.

Corporations may be organized under §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224 for any lawful purpose including, without being limited to any one (1) or more of the following purposes: charitable; benevolent; eleemosynary; educational; civic; patriotic; political; religious; social; fraternal; literary; cultural; athletic; scientific; agricultural; horticultural; animal husbandry; and professional, commercial, industrial, or trade association. However, labor unions, rural electric corporations, cooperative agricultural or marketing associations, etc., organized for either direct or indirect financial gain or advantage, and any cooperative associations coming within the purview of §§ 4-30-101 — 4-30-117, 4-30-201, 4-30-202, and 4-30-204 — 4-30-207 shall be governed by the particular acts applicable to such associations.

§ 4-28-206 Articles of incorporation generally.

(a) Any association of persons or for-profit corporation organized under the Arkansas Business Corporation Act of 1987, § 4-27-101 et seq., desirous of becoming incorporated under the provisions of the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, shall file with the circuit court of the county in which the main office or principal place of business of the proposed corporation is located or proposed to be located signed and verified articles of incorporation, which shall set forth the following:

(1) The name of the corporation;

(2) The period of duration, which may be perpetual;

(3) The purposes for which the corporation is organized;

(4) Any provisions, not inconsistent with law, which the incorporators elect to set forth in the articles of incorporation for the regulation of the internal affairs of the corporation, including any provision for distribution of assets on dissolution or final liquidation;

(5) The address of its main office or principal place of business, and the name of its registered agent at that address;

(6) The number of directors constituting the initial board of directors and the names and addresses of the persons who are to serve as the initial directors;

(7) The name and address of each incorporator;

(8) A statement that the corporation:

(A) Is a nonprofit corporation; and

(B) Has converted under the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28- 209 — 4-28-224; and

(9)(A) A description of the treatment of shares of stock.

(B) The description of the treatment of shares of stock:

(i) May provide for the exchange of shares of stock for certificates of membership if the corporation has members; or

(ii) Shall provide that the shares of stock be canceled by the board of directors if the corporation does not have members.

(b) If the circuit court finds that the articles of incorporation conform to law and that the incorporation is for a lawful purpose and is in the best interests of the public, the court may issue an order approving the incorporation of the proposed association of persons.

(c) If the court approves the incorporation, the articles of incorporation in duplicate, signed and verified, and a copy of the order of the court approving the incorporation shall be transmitted to the Secretary of State, who shall, when all fees have been paid as prescribed in the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224:

(1) File the original of the articles in his or her office; and

(2) Issue a certificate of incorporation to which he or she shall affix the other copy of the articles endorsed with the word “Filed” and the month, day, and year of the filing and return the certificate of incorporation to the incorporators or their representative.

(d) A corporation may amend its articles of incorporation from time to time, provided that the amendments are lawful under the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4- 28-209 — 4-28-224. A copy of all amendments shall be filed with the Secretary of State within thirty (30) days after their passage.

(e)(1) A for-profit corporation may convert to a nonprofit corporation under the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, or the Arkansas Nonprofit Corporation Act of 1993, § 4-33-101 et seq., upon the filing of an amendment to the corporation's articles of incorporation with the information required under this section.

(2) If an entity is a for-profit corporation that is converting to a nonprofit corporation, the conversion shall be approved by a three-fourths vote of the shareholders of the business corporation.

(f) A conversion to a nonprofit corporation under this chapter is effective when an amendment to the articles of incorporation is filed with the Secretary of State and the Secretary of State has collected the filing fees, service fees, and copying fees required under § 4-33-122.

(g) A conversion to a nonprofit corporation under this chapter is not a dissolution.

§ 4-28-207 Charitable, religious, etc., organizations — Amendment of articles of incorporation by operation of law.

Notwithstanding any provision of Arkansas law or in the articles of incorporation to the contrary, the articles of incorporation of each nonprofit corporation organized under the laws of this state which is an exempt charitable, religious, literary, educational, or scientific organization as described in section 501(c)

(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3), shall be deemed to contain the following provisions: “Upon the dissolution of the corporation, the board of trustees shall, after paying or making provision for the payment of all of the liabilities of the corporation, dispose of all of the assets of the corporation exclusively for the purposes of the corporation in such manner, or to such charitable, educational, religious, literary, or scientific purposes as shall at the time qualify as an exempt organization or organizations under section 501(c)(3) of the Internal Revenue Code of 1954, or the corresponding provision of any future United States Internal Revenue Law, as the board of trustees shall determine. Any such assets not so disposed of shall be disposed of by the circuit court of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said court shall determine, which are organized and operated exclusively for such purposes.”

§ 4-28-208 Private foundations — Amendment of articles of incorporation by operation of law.

(a) Notwithstanding any provision in the laws of this state, including the provisions of the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, or in the articles of incorporation to the contrary, except as provided in subsection (c) of this section, the articles of incorporation of each corporation which is a “private foundation” as defined in section 509 of the Internal Revenue Code of 1954, 26 U.S.C. § 509, shall be deemed to contain the following provisions: “The corporation shall make distributions at such time and in such manner as not to become subject to the tax on undistributed income imposed by section 4942 of the Internal Revenue Code of 1954; the corporation shall not engage in any act of self-dealing (as defined in section 4941(d) of the Code) which would subject it to tax under section 4941 of the Code; the corporation shall not retain any excess business holdings (as defined in section 4943(c) of the Code) which would subject it to tax under section 4943 of the Code; the corporation shall not make any investments in such manner as to subject it to tax under section 4944 of the Code; and the corporation shall not make any taxable expenditures (as defined in section 4945(d) of the Code) which would subject it to tax under section 4945 of the Code.”

(b) With respect to any such corporation organized prior to January 1, 1970, subsection (a) of this section shall apply only for its taxable years beginning on or after January 1, 1972.

(c) The articles of incorporation of any corporation described in subsection (a) of this section may be amended to expressly exclude the application of this section, and in the event of amendment, this section shall not apply to that corporation.

(d) Nothing contained in this section shall impair the rights and powers of the courts or any officer, agency, or department of this state with respect to any corporation.

(e) As used in this section, unless the context requires otherwise, all references to “the Code” are to the Internal Revenue Code of 1954, 26 U.S.C. § 1 et seq., and all references to specific sections of the Code include future amendments to the sections and corresponding provisions of any future federal tax laws.

§ 4-28-209 Powers.

Each corporation shall have power:

(1) To have perpetual succession by its corporate name unless a limited period of duration is stated in its articles of incorporation;

(2) To sue and be sued, complain, and defend in its corporate name;

(3) To purchase, take, receive, lease, take by gift, devise, or bequest, or otherwise acquire, own, hold, improve, use, and otherwise deal in and with real or personal property or any interest therein, wherever situated;

(4) To sell, convey, mortgage, pledge, lease, exchange, transfer, and otherwise dispose of all or any part of its property and assets;

(5) To make contracts and incur liabilities, borrow money, issue its notes, bonds, and other obligations, act as a trustee, and secure any of its obligations by mortgage or pledge of all or any of its property, franchises, and income;

(6) To manage its internal affairs in any desired manner so long as the provisions of the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, or other law are not violated; and

(7) To do any and all things necessary, convenient, useful, or incidental to the attainment of its purposes as fully and to the same extent as natural persons lawfully might or could do so long as consistent with the provisions of the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4- 28-224.

§ 4-28-210 Members.

(a) A corporation may have one (1) or more classes of members, or may have no members, as provided in the articles of incorporation.

(b)(1) If a membership fee is collected, a serially numbered certificate evidencing the membership fee shall be issued.

(2) The records of the corporation shall clearly indicate the amount of the fee collected for each serially numbered certificate of membership.

(3) If honorary membership certificates are issued, the records of the corporation shall reflect each and every one (1) issued.

§ 4-28-211 Board of directors.

(a) The directors constituting the first board of directors shall be named in the articles of incorporation and shall hold office until their successors have been elected and qualified. Thereafter, the board of directors shall be elected by vote of the entire membership of the corporation.

(b) The number of directors shall be fixed by the articles of incorporation except that they shall not be fewer than three (3).

(c) The terms of office of the board of directors shall be fixed by the articles of incorporation. However, the terms of office for a perpetually existing corporation shall be not less than one (1) year nor more than six (6) years, and the terms of office for a corporation of limited duration shall be for not more than one-third ( ⅓ ) of the stated period of duration.

(d) Nothing contained in this section shall prevent the staggering of the terms of office of the board of directors, but in no case may a director or directors hold office for longer than his or her specified term, except by reelection as provided in the articles of incorporation and in a manner consistent with the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224.

§ 4-28-212 Voting.

(a) Each member shall be entitled to one (1) vote in the election of the board of directors. Where more than one (1) membership is held by a single entity, the member shall be entitled to one (1) vote for each such membership.

(b) On such other matters as may be subject to vote of the members, the voting right shall be as provided in the articles of incorporation or bylaws.

(c)(1) In all matters as may be subject to the vote of the members, a member may vote in person or by proxy, unless the articles of incorporation or bylaws require such votes to be cast in person at a meeting of the membership held for such purposes.

(2) A member may appoint a proxy to vote or otherwise act for him or her by signing an appointment form, either personally or by his or her attorney-in-fact.

(3) An appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for eleven (11) months unless the member expressly provides for a longer term in the appointment form.

(4) An appointment of a proxy is revocable by the member at any time by written notice regular on its face to the secretary or other officer or agent authorized to tabulate votes.

(5) Subject to § 4-28-224 and to any express limitation on the proxy's authority appearing on the face of the appointment form, a corporation is entitled to accept the proxy's vote or other action as that of the member making the appointment.

§ 4-28-213 Officers.

(a) The officers of a corporation shall consist of a president, vice president, secretary, treasurer, and such other officers and assistant officers as may be deemed necessary.

(b) The officers shall be elected or appointed in such manner and for such terms, not exceeding three

(3) years, as may be prescribed in the articles of incorporation or bylaws.

(c) The articles of incorporation or bylaws may provide that one (1) or more officers of the corporation shall be ex officio members of the board of directors.

§ 4-28-214 Registered agent — Service of process.

(a) Each corporation shall maintain a registered agent at its principal office or place of business upon whom may be served any process, notice, or demand required or permitted by law to be served upon the corporation. The registered agent may be changed upon the filing of proper notice in the office of the Secretary of State.

(b)(1) Whenever a corporation fails to appoint or maintain a registered agent in this state or whenever its registered agent cannot with reasonable diligence be found at the registered office, then the Secretary of State shall be an agent of the corporation upon whom any such process, notice, or demand may be served.

(2) Service on the Secretary of State shall be made by delivering to and leaving with him or her, or with any clerk having charge of the corporation department of his or her office, duplicate copies of the process, notice, or demand.

(3) The Secretary of State shall cause one (1) of the copies of the process, notice, or demand to be forwarded by registered mail or certified mail with a return receipt requested to the corporation at its last known principal office or place of business.

(4) Any service so had on the Secretary of State shall be returnable in not less than thirty (30) days.

(c) Nothing contained in this section shall limit or affect the right to serve any process, notice, or demand required or permitted by law to be served upon a corporation in any manner permitted by law.

§ 4-28-215 Compensation and reimbursement to members, directors, officers, etc.

(a) A corporation may pay compensation in a reasonable amount to its members, directors, or officers for services rendered and may confer benefits upon its members in conformity with its purposes.

(b) A corporation may make reimbursement to its members, directors, officers, or employees for expenses incurred in attending to their authorized duties, the expenses to be evidenced by receipt or other proper document.

§ 4-28-216 Powers of Secretary of State.

(a) The Secretary of State may propound to any corporation, domestic or foreign, subject to the provisions of the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28- 224, and to any officer or director thereof, such interrogatories as may be reasonably necessary and proper to enable him or her to ascertain whether the corporation has complied with all the provisions of the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224.

(b) The Secretary of State shall have such other power and authority reasonably necessary to enable him or her to administer the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, efficiently and to perform the duties imposed upon him or her by the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224.

§ 4-28-217 Rules by state agencies applicable.

(a) If any nonprofit corporation established under the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, engages in any activity controlled or regulated by any officer, agency, or department of this state, the activity shall be conducted in compliance with the laws and such rules as may be promulgated by the officer, agency, or department.

(b) For the purpose of furthering the organization and operation of any nonprofit corporation as authorized by the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28- 224, any such officer, agency, or department of this state may issue necessary permits and licenses to the corporations and regulate the use of the permits and licenses as may be required for the operation of the corporations.

§ 4-28-218 Books and accounting records.

(a) Each corporation shall keep correct and complete books and records of account.

(b) All receipts of moneys and expenditures shall be properly recorded according to accepted accounting principles.

(d) A record of the names and addresses of its members entitled to vote shall be maintained at the principal office or place of business of the corporation.

(e) All books and records of a corporation may be inspected by any member for any proper purpose at any reasonable time.

§ 4-28-219 Shares of stock and dividends prohibited.

(a) A corporation shall not have or issue shares of stock.

(b) No dividend shall be paid and no part of the income of a corporation shall be distributed to its members, directors, or officers.

§ 4-28-220 Loans to directors and officers prohibited.

(a) No loans shall be made by a corporation to its directors or officers.

(b) The directors of a corporation who vote for or assent to the making of a loan to a director or officer and any officers participating in the making of the loan shall be jointly and severally liable to the corporation for the amount of the loan until repayment thereof.

§ 4-28-221 Admission of foreign corporation.

(a) Prior to conducting affairs in this state, a foreign corporation shall first procure a certificate of authority from the Secretary of State.

(b) Application for the certificate of authority shall contain the following information:

(1) The name of the corporation and the state or country under the laws of which it is incorporated;

(2) The date of incorporation and the period of duration of the corporation;

(3) The address of its principal office or place of business;

(4) The name and address of its proposed registered agent for service of process in this state;

(5) Such additional information as may be necessary or appropriate in order to enable the Secretary of State to determine whether that corporation is entitled to a certificate of authority to conduct affairs in this state; and

(6) The purpose or purposes of the corporation which it proposes to pursue in this state.

(c) A foreign corporation upon receiving a certificate of authority under the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, shall enjoy the same, but no greater, rights and privileges as a domestic corporation subject to the provisions of the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, and shall be subject to the same duties, restrictions, penalties, and liabilities now or hereafter imposed upon a domestic corporation of like character.

§ 4-28-222 Involuntary dissolution.

A corporation incorporated under the provisions of the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224, may be dissolved involuntarily by a decree of the Pulaski County Circuit Court in an action filed by the Attorney General or by a decree of the circuit court of the county in which that corporation is domiciled in an action filed by the prosecuting attorney when it is established that:

(1) The corporation procured its articles of incorporation through fraud;

(2) The corporation has continued to exceed or abuse the authority conferred upon it by law;

(3) The corporation has failed for ninety (90) days to appoint and maintain a registered agent in this state;

(4) The corporation has failed to keep proper accounting records as provided in the Arkansas Nonprofit Corporation Act, §§ 4-28-201 — 4-28-206 and 4-28-209 — 4-28-224;

(5) The corporation constitutes a public nuisance; or

(6) The corporation has violated the laws of this state or the rules of any state regulatory board or commission having jurisdiction of any activity of the corporation.

§ 4-28-223 Fees to be paid to Secretary of State.

The Secretary of State shall charge and collect the fees provided under § 4-33-122 for filing the articles of incorporation, amendments, and other filings or certificates under this subchapter.

§ 4-28-224 Corporation's acceptance of votes.

(a) If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a member, the corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member.

(b) If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of a member, the corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member if:

(1) The member is an entity and the name signed purports to be that of an officer or agent of the entity;

(2) The name signed purports to be that of an administrator, executor, guardian, or conservator representing the member and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;

(3) The name signed purports to be that of an attorney-in-fact of the member and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the member has been presented with respect to the vote, consent, waiver, or proxy appointment; or

(4) Two (2) or more persons are the member as cotenants or fiduciaries and the name signed purports to be the name of at least one (1) of the co-owners and the person signing appears to be acting on behalf of all the co-owners.

(c) The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the member.

(d) The corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the member for the consequences of the acceptance or rejection.

(e) Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

§ 4-28-225 Conversion to public water authority.

(a) A corporation which meets the definition of a qualified corporation, as defined by § 4-35-103, may adopt a plan to convert its entity status from that of a nonprofit corporation to a water authority pursuant to the Water Authority Act, § 4-35-101 et seq., unless the articles or bylaws require otherwise, if the conversion is approved:

(1) By a majority of the members of the board of directors of the corporation; and

(2) If the corporation has members, by two-thirds ( ⅔ ) of the votes cast by the members, in person or by proxy, at a regular or special meeting of the members at which a quorum is present.

(b) For purposes of this section and unless the articles or bylaws provide for a higher or lower quorum, ten percent (10%) of the votes entitled to be cast on a matter must be represented in person or by proxy at a meeting of members to constitute a quorum.

§ 4-28-301 Definition.

As used in this subchapter, the terms “corporation”, “foreign corporation”, “not-for-profit corporation”, and “board of directors” shall have the same meaning as stated in the definition of those terms in § 4-28- 202.

§ 4-28-302 Domestic corporations — Merger pursuant to plan.

(a) Any two (2) or more domestic corporations may merge into one (1) of such corporations pursuant to a plan of merger approved in the manner provided in this subchapter.

(b) Each corporation shall adopt a plan of merger setting forth:

(1) The name of the corporations proposing to merge;

(2) The name of the corporation into which they propose to merge, which is hereinafter designated as the surviving corporation;

(3) The terms and conditions of the proposed merger;

(4) A statement of any changes in the articles of incorporation of the surviving corporation to be affected by the merger; and

(5) Any other provisions with respect to the proposed merger as are deemed necessary or desirable.

§ 4-28-303 Domestic corporations — Consolidation pursuant to plan.

(a) Any two (2) or more domestic corporations may consolidate into a new corporation pursuant to a plan of consolidation approved in the manner provided in this subchapter.

(b) Each corporation shall adopt a plan of consolidation setting forth:

(1) The names of the corporations proposing to consolidate;

(2) The name of the new corporation into which they propose to consolidate, which is hereinafter designated as the new corporation;

(3) The terms and conditions of the proposed consolidation;

(4) With respect to the new corporation, all of the statements required to be set forth in articles of incorporation for corporations organized under the Arkansas Nonprofit Corporation Act, § 4-28-201 et seq.; and

(5) Any other provisions with respect to the proposed consolidation as are deemed necessary or desirable.

§ 4-28-304 Domestic corporations — Adoption of plan of merger or consolidation — Abandonment.

(a) A plan of merger or consolidation of domestic corporations shall be adopted in the following manner:

(1)(A) Where the members of any merging or consolidating corporation have voting rights, the board of directors of the corporations shall adopt a resolution approving the proposed plan and directing that it be submitted to a vote at the meeting of members having voting rights, which may be either an annual or a special meeting.

(B) Written or printed notice setting forth the proposed plan or a summary thereof shall be given within a reasonable time before the meeting to each member entitled to a vote at the meeting.

(C) The proposed plan shall be adopted upon receiving at least two-thirds ( ⅔ ) of the votes which members present at the meeting in person or by proxy are entitled to cast, unless any class of members is entitled to vote as a class thereon by the terms of the articles of incorporation or of the bylaws, in which event as to such corporations the proposed plan shall not be adopted unless it also receives at least two-thirds ( ⅔ ) of the votes which members of each such class who are present at the meeting in person or by proxy are entitled to cast; and

(2) Where any merging or consolidating corporation has no members or no members having voting rights, a plan of merger or consolidation shall be adopted at a meeting of the board of directors of that corporation upon receiving the vote of a majority of the directors in office.

(b) After approval, and at any time prior to the filing of the articles of merger or consolidation, the merger or consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the plan of merger or consolidation.

§ 4-28-305 Domestic corporations — Articles of merger or consolidation.

(a) Upon approval, articles of merger or articles of consolidation shall be executed by each corporation by its president or a vice president and by its secretary or an assistant secretary and verified by one (1) of the officers of each corporation signing the articles.

(b) The articles of merger or consolidation shall set forth:

(1) The plan of merger or the plan of consolidation;

(2) Where the members of any merging or consolidating corporation have voting rights, then as to each corporation:

(A) A statement setting forth the date of the meeting of members at which the plan was adopted, that a quorum was present at the meeting, and that the plan received at least two-thirds ( ⅔ ) of the votes which members present at the meeting in person or by proxy were entitled to cast, as well as, in the case of any class entitled to vote as a class thereon by the terms of the articles of incorporation or of the bylaws, at least two-thirds ( ⅔ ) of the votes which members of any such class who were present at the meeting in person or by proxy were entitled to cast; or

(B) A statement that the amendment was adopted by a consent in writing signed by all members entitled to vote with respect thereto; and

(3) Where any merging or consolidating corporation has no members or no members having voting rights, then as to each corporation a statement of that fact, the date of the meeting of the board of directors at which the plan was adopted, and a statement of the fact that the plan received the vote of a majority of the directors in office.

(c) The original and a copy of the articles of merger or articles of consolidation shall be delivered to the Secretary of State.

(d) If the Secretary of State finds that the articles conform to law, he or she shall, when all fees have been paid, including a fee of ten dollars ($10.00) for filing articles of merger or consolidation and issuing a certificate therefor:

(1) Endorse on the original and the copy the word “Filed” and the month, day, and year of the filing thereof;

(2) File the original in his or her office; and

(3) Issue a certificate of merger or a certificate of consolidation to which he or she shall affix the copy.

§ 4-28-306 Domestic corporations — Certificate of merger or consolidation — Merger or consolidation effected upon issuance.

(a) Upon the issuance of the certificate of merger or the certificate of consolidation by the Secretary of State, the merger or consolidation of domestic corporations shall be effected.

(b) The certificate of merger or certificate of consolidation, together with the copy of the articles of merger or articles of consolidation affixed thereto by the Secretary of State, shall be returned to the surviving or new corporation, as the case may be, or its representative.

§ 4-28-307 Domestic corporations — Effect of merger or consolidation.

When the merger or consolidation of domestic corporations has been effected:

(1) The several corporations parties to the plan of merger or consolidation shall be a single corporation, which in the case of a merger shall be that corporation designated in the plan of merger as the surviving corporation and, in the case of consolidation, shall be the new corporation provided for in the plan of consolidation;

(2) Subject to § 4-28-308, the separate existence of all corporations party to the plan of merger or consolidation, except the surviving or new corporation, shall cease;

(3) The surviving or new corporation shall have all the rights, privileges, immunities, and powers and shall be subject to all the duties and liabilities of a corporation organized under the Arkansas Nonprofit Corporation Act, § 4-28-201 et seq.;

(4) The surviving or new corporation shall possess all the rights, privileges, immunities, and franchises, of a public as well as of a private nature, of each of the merging or consolidating corporations;

(5) All real, personal, and mixed property, all debts due on whatever account, all other choses in action, and all and every other interest of or belonging to or due to each of the corporations so merged or consolidated shall be taken and deemed to be transferred to and vested in the single corporation without further act or deed;

(6) The surviving or new corporation shall thenceforth be responsible and liable for all the liabilities and obligations of each of the corporations so merged or consolidated, and any claim existing or action or proceeding pending by or against any of the corporations may be prosecuted as if the merger or consolidation had not taken place or the surviving or new corporation may be substituted in its place. Neither the rights of creditors nor any liens upon the property of any such corporations shall be impaired by merger or consolidation; and

(7) In the case of a merger, the articles of incorporation of the surviving corporation shall be deemed to be amended to the extent, if any, that changes in its articles of incorporation are stated in the plan of merger, and, in the case of a consolidation, the statements set forth in the articles of consolidation and which are required or are permitted to be set forth in the articles of incorporation of corporations organized under the Arkansas Nonprofit Corporation Act, § 4-28-201 et seq., shall be deemed to be the articles of incorporation of the new corporation.

§ 4-28-308 Merger or consolidation of foreign with domestic corporations.

(a) One (1) or more foreign corporations and one (1) or more domestic corporations may be merged or consolidated if the merger or consolidation is permitted by the laws of the state under which each such foreign corporation is organized.

(b)(1) In the case of merger, the surviving corporation may be any one (1) of the constituent corporations and shall be deemed to continue to exist under the laws of the state of its incorporation.

(2) In the case of consolidation, the new corporation may be a corporation organized under the laws of any state under which any of the constituent corporations was organized.

(1)(A) Each domestic corporation shall comply with the provisions of this subchapter with respect to merger or consolidation, as the case may be, of domestic corporations, except that if the surviving or new corporation is to be a foreign corporation, the plan of merger or consolidation shall specify the state under the laws of which the surviving or new corporation is to be governed and the post office address of the registered or principal office of the surviving or new corporation in the state under the laws of which it is to be governed.

(B) However, no domestic corporation shall be merged or consolidated with a foreign corporation unless and until a resolution authorizing the merger or consolidation shall receive, at a meeting of members of the domestic corporation called and conducted in the same manner as provided by § 4-28-304, at least two-thirds ( ⅔ ) of the votes which members present at the meeting in person or by proxy are entitled to cast, and if any class of members is entitled to vote as a class thereon by the terms of the articles of incorporation or of the bylaws, as to the corporation the resolution shall not be adopted unless it shall also receive at least two-thirds ( ⅔ ) of the votes which members of each such class who are present at the meeting in person or by proxy are entitled to cast. If a domestic corporation has no members or no members having voting rights, the plan of merger or consolidation shall be adopted at a meeting of the board of directors of the corporation upon receiving the vote of a majority of the directors in office;

(2) Each foreign corporation, if it is to transact business in this state, shall file with the Secretary of State of this state within thirty (30) days after the merger or consolidation, as the case may be, shall become effective, a copy of the plan, articles, or other document filed in the state of its incorporation for the purpose of effecting the merger or consolidation, certified by the public officer having custody of the original;

(3) If the surviving or new corporation, as the case may be, is a foreign corporation, it shall comply with the provisions of the Arkansas Nonprofit Corporation Act, § 4-28-201 et seq., with respect to foreign corporations if it is to transact business in this state, and in every case it shall file with the Secretary of State of this state a statement confirming that the foreign corporation has filed a statement appointing an agent for service of process under § 4-20-112 and may be served with process under § 4-20-113 if the foreign corporation fails to appoint or maintain a registered agent for service of process; and

(4) Upon compliance by each domestic and foreign corporation which is a party to the merger or consolidation with the provisions of this subchapter with respect to merger or consolidation, and upon issuance by the Secretary of State of this state of the certificate of merger or the certificate of consolidation provided for in this subchapter, the merger or consolidation shall be effected in this state.

(d) The effect of the merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations if the surviving or new corporation is a domestic corporation. If the surviving or new corporation is a foreign corporation, the effect of the merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations except insofar as the laws of such other states provide otherwise.

§ 4-28-309 Continuation of prior corporate existence for limited purpose.

(a) The corporate existence of each constituent corporation which has been dissolved through merger or consolidation shall be continued indefinitely for the limited purpose of enabling the constituent corporation to execute through its own officers formal deeds, conveyances, assignments, and other instruments evidencing the transfer from the constituent to the surviving corporation, or new corporation created by consolidation, of any or all real and personal properties which have passed from the constituent to the surviving or consolidated corporation by operation of law.

(b) The execution of the instruments shall not be essential to effect the transfer of title from the constituent to the surviving or consolidated corporation, inasmuch as the transfer will take effect through operation of law, but the power to execute such instruments is given to the end that it may be exercised:

(1) In respect to properties located in foreign jurisdictions which may not recognize a transmittal of title by operation of law under the merger and consolidation statutes of this state; and

(2) In any other situation where the directors of the surviving or consolidated corporation consider the execution of the instruments desirable.

§ 4-28-401 Definitions.

As used in this subchapter, unless the context otherwise requires:

(1) “Charitable organization” means any person:

(A) Who is or holds himself or herself out to be established for:

(i) Any benevolent, educational, philanthropic, humane, scientific, patriotic, social welfare or advocacy, public health, environmental conservation, civic, or other eleemosynary purpose; or

(ii) The benefit of law enforcement personnel, fire fighters, or other persons who protect the public safety; or

(B) Who in any manner employs a charitable appeal as the basis of any solicitation or an appeal which has a tendency to suggest there is a charitable purpose to any solicitation;

(2) “Charitable purpose” means any benevolent, educational, philanthropic, humane, scientific, patriotic, social welfare or advocacy, public health, environmental conservation, civic, or eleemosynary objective;

(3) “Charitable sales promotion” means an advertising or sales campaign conducted by a commercial coventurer which represents that the purchase or use of goods or services offered by the commercial coventurer will benefit a charitable organization or purpose;

(4) “Commercial coventurer” means any person who for profit or other consideration is regularly and primarily engaged in trade or commerce other than in connection with the raising of funds or any other thing of value for a charitable organization and who advertises that the purchase or use of his or her goods, services, entertainment, or any other thing of value normally sold without a charitable appeal will benefit a charitable organization during a charitable sales promotion;

(5) “Contribution” means the grant, promise, or pledge of money, credit, property, financial assistance, or other thing of value in response to a solicitation;

(6)(A) “Fund-raising counsel” means any person who for a flat fixed fee or fixed hourly rate under a written agreement plans, conducts, manages, carries on, advises, or acts as a consultant, whether directly or indirectly, in connection with soliciting contributions for or on behalf of any charitable organization, but who actually solicits no contributions as a part of the services.

(B) Fund-raising counsel do not receive or control funds or assets solicited for charitable purposes, nor do they procure or employ any compensated person to do so.

(C) No lawyer, investment counselor, or banker who advises a person to make a contribution shall be deemed, as a result of that advice, to be a fund-raising counsel.

(D) A bona fide salaried officer or employee of a registered or exempt charitable organization shall not be deemed to be a fund-raising counsel;

(7) “Gross revenue” means income of any kind from all sources, including all amounts received as the result of any solicitation by a paid solicitor;

(8)(A) “Membership” means those persons to whom, for payment of fees, dues, assessments, etc., an organization provides services and confers a bona fide right, privilege, professional standing, honor, or other direct benefit in addition to the right to vote, elect officers, or hold offices.

(B) The term “membership” shall not include those persons who are granted a membership upon making a contribution as the result of solicitation;

(9)(A) “Paid solicitor” means a person who for compensation, other than any nonmonetary gift of nominal value awarded to a volunteer solicitor as an incentive or token of appreciation, performs for a charitable organization any service in connection with which contributions are solicited by the person or by any other person he or she employs, procures, or engages to solicit for compensation.

(B) A lawyer, investment counselor, or banker who advises a person to make a contribution is not a paid solicitor as a result of that advice.

(10) “Parent organization” means that part of a charitable organization which supervises and exercises control over the solicitation and expenditure activities of one (1) or more chapters, branches, or affiliates;

(11) “Person” means:

(A) An individual;

(B) A corporation;

(D) An association;

(E) A partnership;

(F) A foundation; or

(G) Any other entity, however styled;

(12) “Professional telemarketer” means any person who is employed or retained for compensation by a paid solicitor to solicit contributions in this state for charitable purposes; and

(13)(A) “Solicitation” means each request, either directly or indirectly, for a contribution on the plea or representation that the contribution will be used for a charitable purpose.

(B) “Solicitation” shall be deemed to occur when the request is made, at the place the request is received, whether or not the person making the request actually receives any contribution and includes, without limitation, the following methods of requesting a contribution:

(i) Any oral or written request;

(ii) Any announcement concerning an appeal or campaign to which the public is requested to make a contribution for any charitable purpose connected therewith:

(a) To the press;

(b) Over radio or television; or

(iii) The distribution, circulation, posting, or publishing of any handbill, written advertisement, or other publication which directly or by implication seeks to obtain public support; or

(iv) The sale of, offer of, or attempt to sell any advertisement, advertising space, subscription, ticket, or any service or tangible item:

(a) In connection with which any appeal is made for any charitable purpose or where the name of any charitable organization is used or referred to in the appeal as an inducement or reason for making the sale; or

(b) When or where, in connection with any sale, any statement is made that the whole or any part of the proceeds from the sale will be donated to any charitable purpose.

§ 4-28-402 Registration of charitable organizations prior to solicitation.

(a)(1) A charitable organization, in or out of the state, shall not solicit contributions from persons in this state by any means whatsoever until the charitable organization has:

(A) Registered; and

(B) Provided certain information concerning the charitable organization and its solicitation activity, as required by this subchapter, on forms to be provided by the Secretary of State, and has filed the information with the Secretary of State.

(2) The information so filed shall be available to the general public as a matter of public record, except and to the extent the records would otherwise be exempt from disclosure under the Freedom of Information Act of 1967, § 25-19-101 et seq.

(b) The information required under subdivision (a)(1)(B) of this section shall be submitted in writing, sworn to under oath, and provided on a registration form provided by the Secretary of State, to include without limitation:

(1) The identity of the charitable organization by or for whom the solicitation is to be conducted, including without limitation:

(A) The federal Taxpayer Identification Number;

(B) Fictitious names or aliases under which the charitable organization operates;

(D) All chapters, branches, or affiliates that will operate, if any, under the registration of the parent charitable organization;

(2) The mailing address and physical address of the charitable organization;

(3) The charitable purpose of the charitable organization;

(4) The individual or officer who will have custody of the contributions;

(5) The individuals responsible for the distribution of the contributions;

(6) The period of time during which the solicitation or promotion is to be conducted;

(7) A description of the method or methods of solicitation or promotion, in such detail as may from time to time be determined by the Secretary of State;

(8) Whether any solicitation or promotion is to be conducted by voluntary unpaid solicitors, by paid solicitors, or both;

(9) If in whole or in part by paid solicitors:

(A) The name and address of each paid solicitor;

(B) The basis of payment;

(D) A copy of the contract for services; and

(10) A copy of the appropriate Internal Revenue Service tax-exempt status form.

(c) A chapter, branch, or affiliate in this state of a registered parent charitable organization is not required to register provided the parent charitable organization files a consolidated financial report or tax information form for itself and the chapter, branch, or affiliate.

§ 4-28-403 Annual financial reports and fiscal records.

(a)(1)

(A) Each charitable organization subject to this subchapter shall file with the Secretary of State an annual financial report on forms prescribed by the Secretary of State no later than one hundred eighty

(180) days after the last date of the charitable organization's fiscal year.

(B) The annual financial report described in subdivision (a)(1)(A) of this section shall be accompanied by a copy of all tax or information returns, including all schedules and amendments, submitted by the charitable organization to the Internal Revenue Service for the previous reporting year, except any schedules of contributors to the organization.

(2) A charitable organization which maintains its books on other than a calendar-year basis, upon application to the Secretary of State, may be permitted to file the annual financial report described in subdivision (a)(1)(A) of this section with its tax or information returns referred to in subdivision (a)(1)(B) of this section within six (6) months after the close of its fiscal year.

(b)(1) A charitable organization with contributions in excess of one million dollars ($1,000,000) during its preceding fiscal year shall file an audited financial statement prepared by an independent certified public accountant.

(2) A charitable organization with contributions in excess of five hundred thousand dollars ($500,000) but less than one million dollars ($1,000,000) during its preceding fiscal year shall have its financial statement reviewed by an independent certified public accountant.

(3) For purposes of this section, “contribution” does not include a:

(A) Bequest to a charitable organization that is received from a decedent's estate; or

(B) Testamentary distribution to a charitable organization that is received from a trust.

(c) Charitable organizations that are required to register with the Secretary of State but are not required to file an information or tax return with the Internal Revenue Service should submit in lieu of the information or tax return an annual report on forms to be provided by the Secretary of State.

(d)(1) The Secretary of State may grant an extension of time not to exceed six (6) months for the filing of the tax records and other reports required by this section upon the charitable organization's filing a notice that states the need for an extension.

(2) The Secretary of State may grant a charitable organization an additional three (3) months extension of time under subdivision (d)(1) of this section upon written request by the charitable organization.

(e)(1) Every charitable organization subject to the provisions of this subchapter shall keep a full and true record in such form as will enable the charitable organization accurately to provide the information required by this subchapter.

(2) All the records shall be open to inspection and copying at all times by the Secretary of State and the Attorney General.

(3) The charitable organization shall retain records for at least five (5) years after the end of the fiscal year to which they relate.

(4)(A) Any donor lists obtained under this subsection are not subject to disclosure under the Freedom of Information Act of 1967, § 25-19-101 et seq., without a court order authorizing the disclosure.

(B) However, donor lists and other records obtained under this subsection may be disclosed to other law enforcement agencies.

§ 4-28-404 Charitable organizations exempted from registration and financial disclosure requirements.

The following charitable organizations are not subject to the reporting requirement under §§ 4-28-403 and 4-28-405, provided each organization shall submit an application for a reporting exemption to the Secretary of State, on forms prescribed by the Secretary of State, together with any information as the Secretary of State may require to substantiate a reporting exemption under this section:

(1) Religious organizations, i.e., any bona fide, duly constituted religious entity if the entity satisfies each of the following criteria:

(A) The entity is exempt from taxation pursuant to the Internal Revenue Code; and

(B) No part of the entity's net income inures to the direct benefit of any individual;

(2) Educational institutions, i.e., any parent-teacher association or educational institution, the curricula of which in whole or in part are registered or approved by any state or the United States either directly or by acceptance of accreditation by an accrediting body;

(3) Political candidates and organizations, i.e., any candidate for national, state, or local elective office or a political party or other committee required to file information with the Federal Election Commission or any state election commission or its equivalent agency;

(4) Governmental organizations, i.e., any department branch or other instrumentality of the federal, state, or local governments;

(5) Nonprofit hospitals, i.e., any nonprofit hospital licensed by this state or in any other state;

(6) Any charitable organization which does not intend to solicit and receive, and does not actually receive, contributions in excess of fifty thousand dollars ($50,000) during a calendar year:

(A) If all of its functions, including its fund-raising functions, are carried on by persons who are unpaid for their services; and

(B) Provided that no part of its assets or income inures to the benefit of or is paid to any officer or member; and

(7) Any person who solicits solely for the benefit of organizations described in subdivisions (1)-(6) of this section.

§ 4-28-405 Charitable organization — Filing of contracts.

(a) Each contract between a charitable organization and a fund-raising counsel shall be in writing and shall be filed by the charitable organization with the Secretary of State before the performance by the fund-raising counsel of any material services under the contract.

(b) The contract shall contain any information that will enable the Secretary of State to identify the services the fund-raising counsel is to provide and the manner of his or her compensation.

§ 4-28-406 Fund-raising counsel — Registration — Fees.

(a) A person shall not act as a fund-raising counsel until he or she has first registered with the Secretary of State.

(b) Applications for registration shall be submitted:

(1) In writing;

(2) Under oath;

(3) In the form prescribed by the Secretary of State; and

(4) Accompanied by an annual fee in the sum of one hundred dollars ($100).

(c)(1) Registrations are valid for a period of one (1) year.

(2) Registrations may be renewed upon the filing of a new application and the tendering of the fee previously prescribed for registration.

§ 4-28-407 Paid solicitors — Registration, fees, and bond — Filing of contracts — Solicitation notice — Contract requirements — Prohibited practices — Records — Deposit of funds.

(a)(1) A person shall not act as a paid solicitor unless he or she has first registered with the Secretary of State.

(2) Applications for registration shall be submitted:

(A) In writing;

(B) In the form prescribed by the Secretary of State; and

(3) Each registration is valid for one (1) year and may be renewed for additional one-year periods.

(b)(1) An applicant for registration as a paid solicitor at the time of making the application shall file with and have approved by the Secretary of State a bond in which the applicant shall be the principal obligor in the sum of ten thousand dollars ($10,000), with one (1) or more responsible sureties whose liability in the aggregate as the sureties shall be no less than that sum.

(2)(A) The bond shall run to the Secretary of State and the Attorney General for the use of the state and to any person, including a charitable organization, that may have a cause of action against the paid solicitor for any liabilities resulting from the paid solicitor's conduct of any activities in violation of this subchapter or arising out of a violation of this subchapter or any rule adopted under this subchapter, including any actions arising under this subchapter that give rise to a violation of the Deceptive Trade Practices Act, § 4-88-101 et seq.

(B) However, the aggregate liability of the surety to the state and to all other persons, including charitable organizations, shall not exceed the sum of the bond.

(c) At least fifteen (15) days before the commencement of each solicitation campaign, a paid solicitor shall file with the Secretary of State a copy of the contract described in subsection (d) of this section.

(d) A contract between a paid solicitor and a charitable organization shall:

(1) Be in writing;

(2) Clearly state the respective obligations of the paid solicitor and the charitable organization, including the compensation or remuneration to be paid by the charitable organization to the paid solicitor; and

(3) Require delivery of the names and addresses of all persons making contributions and the amounts thereof to the charitable organization.

(e)(1) A paid solicitor shall not represent that any part of the contributions received will be given or donated to any charitable organization unless the organization has consented in writing to the use of its name before the solicitation campaign.

(2) The written consent shall be signed by an authorized officer, director, or trustee of the charitable organization.

(f)(1) A paid solicitor shall not represent that tickets to an event are to be donated for use by another person unless the paid solicitor has first obtained a commitment in writing from a charitable organization stating that it will accept donated tickets and specifying the number of tickets that it will accept and provided no more contributions for donated tickets shall be solicited than the number of ticket commitments received from the charitable organization.

(2) A charitable organization shall not commit to accept more donated tickets than it can reasonably expect to use.

(3) Donated tickets shall be used according to the representations made to the consumer at the time of solicitation.

(g) A paid solicitor shall require any person he or she employs, procures, or engages to solicit to comply with the provisions of subsections (e) and (f) of this section.

(h)(1) A paid solicitor shall file a financial report for a solicitation campaign with the Secretary of State no more than ninety (90) days after a solicitation campaign has been completed and on the anniversary of the commencement of any solicitation campaign which lasts more than one (1) year.

(2) The financial report shall include gross revenue and an itemization of all expenditures incurred and the amount of moneys ultimately remitted to the charitable organization absent payment of any fees or costs to the paid solicitor.

(3) The report shall be completed on a form prescribed by the Secretary of State.

(4) An authorized official of the paid solicitor and two (2) authorized officials of the charitable organization shall sign the report, and they shall certify, under oath, that the report is true and complete to the best of their knowledge.

(i) A paid solicitor shall maintain during each solicitation campaign and for at least five (5) years after the completion of each solicitation campaign the following records, which shall be available to the Secretary of State and the Attorney General for inspection upon request:

(1) The name and residence of each employee, agent, or other person involved in the solicitation campaign;

(2) Records of all income received and expenses incurred in the course of the solicitation campaign; and

(3) The names and addresses of all persons making contributions and the amounts thereof.

(j) If a paid solicitor sells tickets to an event and represents that tickets will be donated for use by another, the paid solicitor shall maintain for at least five (5) years after the completion of the event the following record, which shall be available to the Secretary of State and the Attorney General for inspection upon request:

(1) The name and address of all organizations receiving donated tickets for use by others; and

(2) The number of tickets received by each organization.

(k) Each contribution in the control or custody of the paid solicitor shall, in its entirety and within five (5) days of its receipt, be deposited, maintained, and administered in an account in a bank or other federally insured financial institution that shall be in the name of the charitable organization and over which that charitable organization has sole control over all withdrawals.

(l) Any material change in any information filed with the Secretary of State pursuant to this section shall be reported in writing by the paid solicitor to the Secretary of State not more than thirty (30) days after the change occurs.

(m) All records required under this section shall be open to inspection, examination, and copying during usual and customary business hours by the Secretary of State and the Attorney General or other authorized agencies.

§ 4-28-408 Commercial coventurers — Filing of contracts — Terms — Accounting — Disclosures required in advertising.

(a)(1) Every charitable organization subject to the registration requirements of this subchapter that agrees to permit a charitable sales promotion to be conducted in its behalf shall obtain a written agreement from the commercial coventurer and file a copy of the agreement with the Secretary of State before the commencement of the charitable sales promotion within this state.

(2) An authorized representative of the charitable organization and the commercial coventurer shall sign the agreement, and the terms of the agreement shall include at a minimum the following:

(A) The goods or services to be offered to the public;

(B) The geographic area where, and the starting and final date when, the offering is to be made;

(C) The manner in which the name of the charitable organization is to be used, including any representation to be made to the public as to the amount or percent per unit of goods or service purchased or used that is to benefit the charitable organization;

(D) A provision for an accounting on a per unit basis to be given by the commercial coventurer to the charitable organization and the date on which it is to be made; and

(E) The date when and the manner in which the benefit is to be conferred on the charitable organization.

(b) A commercial coventurer shall keep the final accounting for each charitable sales promotion for three

(3) years after the accounting date, and the accounting shall be available to the Secretary of State and the Attorney General upon reasonable request.

(c)(1) A commercial coventurer shall disclose in each advertisement for a charitable sales promotion the amount per unit of goods or services purchased or used that is to benefit the charitable organization or purpose.

(2) The amount may be expressed as a dollar amount or as a percentage of the value of the goods or services purchased or used.

§ 4-28-409 Disclosures.

(a) It is an unlawful practice for any person to solicit or request contributions when any part of the proceeds is pledged to be given to a charitable organization or solicited for a charitable purpose unless:

(1) The person discloses to each party solicited and to every purchaser, prior to accepting funds, the identity of the person responsible for soliciting the funds and whether any compensation is received for those services;

(2) Whether soliciting by telephone, by mail, or by any other means, the person clearly and unambiguously discloses to each party and every purchaser, at the time or point of solicitation, his or her professional status; and

(3) Upon request by a solicited party, the person truthfully and accurately discloses the percentage of funds raised which is being paid to the solicitor, either directly or as reimbursement of costs, and what percentage will be ultimately retained by the charity.

(b)(1) The provisions of this section shall not apply to any bona fide full-time employee of a charitable organization or to any volunteer who donates or gives all of the gross proceeds from sales or all contributions to the organizations for which the funds or things of value were solicited.

(2) However, this exemption shall not apply to any person who directly or indirectly receives a commission as compensation for services in relation to fund-raising activities performed for the charitable organization.

§ 4-28-410 Documents.

(a) All contracts, scripts, pamphlets, handouts, and other materials used by paid solicitors shall be in writing, and true and correct copies of all documents used in any promotion shall be kept on file in the offices of the paid solicitor and in the offices of the charitable organization on whose behalf the promotion is conducted for a period of five (5) years from the date the solicitation of contributions for the promotion commences.

(b) The documents shall be available for inspection, examination, and copying by the Secretary of State and the Attorney General and other authorized agencies during usual and customary business hours.

§ 4-28-411 Professional telemarketers — Registration and renewal.

(a) Every professional telemarketer shall be employed in a principal-agent relationship by a paid solicitor registered under this subchapter and shall, within seventy-two (72) hours after accepting employment, register with the Secretary of State.

(b) An application for registration under this section shall be in writing, under oath, in the form prescribed by the Secretary of State, and shall be accompanied by a fee in the sum of ten dollars ($10.00).

(c) When effected, the registration shall be for a period of one (1) year and may be renewed upon the payment of the fee prescribed in this section for additional one-year periods.

§ 4-28-412 Prohibited acts.

It shall be a violation of this subchapter for:

(1) Any person to make any misrepresentation, either express or implied, during the course of soliciting funds for a charitable organization;

(2) Any charitable organization to engage in any financial transaction that knowingly jeopardizes or interferes with the ability of the charitable organization to accomplish its charitable purpose;

(3) Any person to knowingly use or exploit the fact of registration so as to lead the public to believe that such registration constitutes an endorsement or approval by the state;

(4) Any person to knowingly misrepresent that any other person sponsors or endorses a solicitation;

(5) Any person to knowingly either use the name of a charitable organization or display any emblem, device, or printed matter belonging to or associated with a charitable organization without the express written permission of the charitable organization;

(6) Any charitable organization to knowingly use a name that is the same as or confusingly similar to the name of another charitable organization unless the latter organization consents in writing to its use;

(7) Any charitable organization to represent itself as being associated with another charitable organization without the express written acknowledgment and endorsement of the other charitable organization;

(8) Any person to knowingly make any false or misleading statements on any document required to be filed with the Secretary of State;

(9) Any person to fail to substantially comply with the requirements of this subchapter;

(10) Any charitable organization to use the services of an unregistered paid solicitor who is required to register pursuant to this subchapter;

(11) Any paid solicitor to solicit contributions from citizens or entities located in this state on behalf of an unregistered charitable organization; and

(12) Any person to use an Arkansas address, including a return address, in any solicitation unless the:

(A) Charitable organization maintains and staffs an office at that address;

(B) Solicitation discloses in writing immediately proximate to the address located in this state both the address of the charitable organization's actual headquarters and the fact that the address is that of a mail drop box or is located in a mail-handling facility; or

(C) Person, if soliciting by phone, discloses the address of the organization's actual headquarters in addition to any address maintained in this state.

§ 4-28-413 Nonresident organization — Service of process.

(a) A nonresident charitable organization, paid solicitor, fund-raising counsel, or professional telemarketer desiring to solicit funds within the State of Arkansas shall file with the Secretary of State an irrevocable written consent that in suits, proceedings, and actions growing out of the violation of this subchapter, or as a result of any activities conducted within this state giving rise to a cause of action, service on the Secretary of State shall be as valid and binding as if due service had been made on the charitable organization, paid solicitor, fund-raising counsel, or professional telemarketer.

(b)(1) In case any process or pleadings are served upon the Secretary of State, they shall be in triplicate, one (1) copy of which shall be filed with the Secretary of State, one (1) copy of which shall be forwarded by the Secretary of State to the Attorney General, and the other immediately forwarded by the Secretary of State by registered or certified mail to the principal office or place of business of the nonresident charitable organization, paid solicitor, fund-raising counsel, or professional telemarketer.

(2) Service placed upon the Secretary of State shall be returned no later than thirty (30) days.

§ 4-28-414 City ordinances provisionally authorized.

Nothing contained in the provisions of this subchapter shall prohibit any city or incorporated town in the State of Arkansas from enacting otherwise lawful ordinances regulating a solicitation of contributions within the limits of the city.

§ 4-28-415 Disposition of fees.

All registration fees collected by the Secretary of State under this subchapter shall be deposited into the State Treasury, and the Treasurer of State shall credit them as general revenues to the various funds in the respective amounts to each and to be used as provided in the Revenue Stabilization Law, § 19-20- 101 et seq.

§ 4-28-416 Violation of the Deceptive Trade Practices Act.

(a)(1) A violation of the provisions of this section shall constitute an unfair and deceptive act or practice, as defined by the Deceptive Trade Practices Act, § 4-88-101 et seq.

(2) All remedies, penalties, and authority granted to the Attorney General or other persons under the Deceptive Trade Practices Act, § 4-88-101 et seq., shall be available to the Attorney General or other persons for the enforcement of this subchapter.

(b) Nothing in this section limits the rights or remedies which are otherwise available to a consumer under any other law.

(c) The obligations under this section are cumulative and should in no way be deemed to limit the obligations imposed under any other law.

§ 4-28-417 Access to records.

The Attorney General shall have access to all records filed with the Secretary of State under this subchapter.

§ 4-28-418 Limitations on regulation by a public agency.

(a) Except where specifically required or authorized by federal law, no state agency or state official shall impose an annual filing or reporting requirement on a nonprofit organization regulated or specifically exempted from regulation under this chapter that is more stringent, restrictive, or expansive than the requirements authorized by state statute.

(b) The exception under subsection (a) of this section shall not:

(1) Apply to:

(A) State grants and contracts;

(B) Fraud investigations;

(D) Regulation or licensing by the Department of Labor and Licensing;

(2) Restrict enforcement actions against specific nonprofit organizations; or

(3) Restrict or limit the functions, powers, and duties granted to the Attorney General to investigate violations of state or federal law and to enforce state or federal law.

§ 4-28-501 Repealed

[Repealed] – § 4-28-517

§ 4-28-601 Short title.

This subchapter may be cited as the Revised Uniform Unincorporated Nonprofit Association Act.

§ 4-28-602 Definitions.

In this subchapter:

(1) “Established practices” means the practices used by an unincorporated nonprofit association without material change during the most recent five years of its existence, or if it has existed for less than five years, during its entire existence.

(2) “Governing principles” means the agreements, whether oral, in a record, or implied from its established practices, that govern the purpose or operation of an unincorporated nonprofit association and the rights and obligations of its members and managers. The term includes any amendment or restatement of the agreements constituting the governing principles.

(3) “Manager” means a person that is responsible, alone or in concert with others, for the management of an unincorporated nonprofit association.

(4) “Member” means a person that, under the governing principles, may participate in the selection of persons authorized to manage the affairs of the unincorporated nonprofit association or in the development of the policies and activities of the association.

(5) “Person” means an individual, corporation, business trust, statutory entity trust, estate, trust, partnership, limited liability company, cooperative, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(6) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(7) “State” means a state of the United States, the District of Columbia, Puerto Rico, United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(8) “Unincorporated nonprofit association” means an unincorporated organization consisting of two or more members joined under an agreement that is oral, in a record, or implied from conduct, for one or more common, nonprofit purposes. The term does not include:

(A) a trust;

(B) a marriage, domestic partnership, common law domestic relationship, civil union, or other domestic living arrangement;

(C) an organization formed under any other statute that governs the organization and operation of unincorporated associations;

(D) a joint tenancy, tenancy in common, or tenancy by the entireties even if the co-owners share use of the property for a nonprofit purpose; or

(E) a relationship under an agreement in a record that expressly provides that the relationship between the parties does not create an unincorporated nonprofit association.

§ 4-28-603 Relation to other law.

(a) Principles of law and equity supplement this subchapter unless displaced by a particular provision of it.

(b) A statute governing a specific type of unincorporated nonprofit association prevails over an inconsistent provision in this subchapter, to the extent of the inconsistency.

(c) This subchapter supplements the law of this state that applies to nonprofit associations operating in this state. If a conflict exists, that law applies.

§ 4-28-604 Governing law.

(a) Except as otherwise provided in subsection (b), the law of this state governs the operation in this state of all unincorporated nonprofit associations formed or operating in this state.

(b) Unless the governing principles specify a different jurisdiction, the law of the jurisdiction in which an unincorporated nonprofit association has its main place of activities governs the internal affairs of the association.

§ 4-28-605 Legal entity; Perpetual existence; Powers.

(a) An unincorporated nonprofit association is a legal entity distinct from its members and managers.

(b) An unincorporated nonprofit association has perpetual duration unless the governing principles specify otherwise.

(c) An unincorporated nonprofit association has the same powers as an individual to do all things necessary or convenient to carry on its purposes.

(d) An unincorporated nonprofit association may engage in profit-making activities but profits from any activities must be used or set aside for the association's nonprofit purposes.

§ 4-28-606 Ownership and transfer of property.

(a) An unincorporated nonprofit association may acquire, hold, encumber, or transfer in its name an interest in real or personal property.

(b) An unincorporated nonprofit association may be a beneficiary of a trust or contract, a legatee or a devisee.

§ 4-28-607 Statement of authority as to real property.

(a) In this section, “statement of authority” means a statement authorizing a person to transfer an interest in real property held in the name of an unincorporated nonprofit association.

(b) An interest in real property held in the name of an unincorporated nonprofit association may be transferred by a person authorized to do so in a statement of authority recorded by the association in the office in the county in which a transfer of the property would be recorded.

(1) the name of the unincorporated nonprofit association;

(2) the address in this state, including the street address, if any, of the association or, if the association does not have an address in this state, its out-of-state address;

(3) that the association is an unincorporated nonprofit association; and

(4) the name, title, or position of a person authorized to transfer an interest in real property held in the name of the association.

(d) A statement of authority must be executed in the same manner as an affidavit by a person other than the person authorized in the statement to transfer the interest.

(e) A filing officer may collect a fee for recording a statement of authority in the amount authorized for recording a transfer of real property.

(f) A document amending, revoking, or canceling a statement of authority or stating that the statement is unauthorized or erroneous must meet the requirements for executing and recording an original statement.

(g) Unless canceled earlier, a recorded statement of authority and its most recent amendment expire five years after the date of the most recent recording.

(h) If the record title to real property is in the name of an unincorporated nonprofit association and the statement of authority is recorded in the office of the county in which a transfer of the property would be recorded, the authority of the person named in the statement to transfer is conclusive in favor of a person that gives value without notice that the person lacks authority.

§ 4-28-608 Liability.

(a) A debt, obligation, or other liability of an unincorporated nonprofit association, whether arising in contract, tort, or otherwise:

(1) is solely the debt, obligation, or other liability of the association; and

(2) does not become a debt, obligation, or other liability of a member or manager solely because the member acts as a member or the manager acts as a manager.

(b) A person's status as a member or manager does not prevent or restrict law other than this subchapter from imposing liability on the person or the association because of the person's conduct.

§ 4-28-609 Assertion and defense of claims.

(a) An unincorporated nonprofit association may sue or be sued in its own name.

(b) A member or manager may assert a claim the member or manager has against the unincorporated nonprofit association. An association may assert a claim it has against a member or manager.

§ 4-28-610 Effect of judgment or order.

A judgment or order against an unincorporated nonprofit association is not by itself a judgment or order against a member or manager.

§ 4-28-611 Appointment of agent to receive service of process.

(a) An unincorporated nonprofit association may file in the office of the Secretary of State a statement appointing an agent authorized to receive service of process.

(b) A statement appointing an agent must set forth:

(1) the name of the unincorporated nonprofit association; and

(2) the name of the person in this state authorized to receive service of process and the person's address, including the street address, in this state.

(c) A statement appointing an agent must be signed and acknowledged by a person authorized to manage the affairs of the unincorporated nonprofit association and by the person appointed as the agent. By signing and acknowledging the statement the person becomes the agent.

(d) An amendment to or cancellation of a statement appointing an agent to receive service of process must meet the requirements for executing of an original statement. An agent may resign by filing a resignation in the office of the Secretary of State and giving notice to the association.

(e) The Secretary of State may collect a fee for filing a statement appointing an agent to receive service of process, an amendment, a cancellation, or a resignation in the amount charged for filing similar documents.

§ 4-28-612 Service of process.

In an action or proceeding against an unincorporated nonprofit association, process may be served on an agent authorized by appointment to receive service of process, on a manager of the association, or in any other manner authorized by the law of this state.

§ 4-28-613 Action or proceeding not abated by change.

An action or proceeding against an unincorporated nonprofit association does not abate merely because of a change in its members or managers.

§ 4-28-614 Venue.

Unless otherwise provided by law other than this subchapter, venue of an action against an unincorporated nonprofit association brought in this state is determined under the statutes applicable to an action brought in this state against a corporation.

§ 4-28-615 Member not agent.

A member is not an agent of the association solely by reason of being a member.

§ 4-28-616 Approval by members.

(a) Except as otherwise provided in the governing principles, an unincorporated nonprofit association must have the approval of its members to:

(1) admit, suspend, dismiss, or expel a member;

(2) select or dismiss a manager;

(3) adopt, amend, or repeal the governing principles;

(4) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the association's property, with or without the association's goodwill, outside the ordinary course of its activities;

(5) dissolve under § 4-28-628(a)(2) or merge under § 4-28-630;

(6) undertake any other act outside the ordinary course of the association's activities; or

(7) determine the policy and purposes of the association.

(b) An unincorporated nonprofit association must have the approval of the members to do any other act or exercise a right that the governing principles require to be approved by members.

(c)(1) It is the public policy of the State of Arkansas to ensure that the members of an unincorporated nonprofit association remain in control over the governing principles, purposes, and policies of their association.

(2) This section shall not be construed as limiting the right of the members of an unincorporated nonprofit association to adopt, amend, restate, or repeal the governing principles of their association.

(3)(A) In addition to any manner stated in the governing principles, the members of an unincorporated nonprofit association shall retain the right to adopt, amend, restate, or repeal the governing principles by majority approval of its members.

(B) The governing principles as amended or restated shall be given effect upon approval by a majority of the members.

(C) A person who is not a member of the unincorporated nonprofit association has no standing to object to, or challenge the validity of, the members' adoption, amendment, or repeal of the unincorporated nonprofit association's governing principles, purposes, and policies.

§ 4-28-617 Meetings of members; Voting, notice, and quorum requirements.

(a) Unless the governing principles provide otherwise:

(1) approval of a matter by members requires an affirmative majority of the votes cast at a meeting of members; and

(2) each member is entitled to one vote on each matter that is submitted for approval by members.

(b) Notice and quorum requirements for member meetings and the conduct of meetings of members are determined by the governing principles.

§ 4-28-618 Duties of member.

(a) A member does not have a fiduciary duty to an unincorporated nonprofit association or to another member solely by being a member.

(b) A member shall discharge the duties to the unincorporated nonprofit association and the other members and exercise any rights under this subchapter consistent with the governing principles and the obligation of good faith and fair dealing.

§ 4-28-619 Admission, suspension, dismissal, or expulsion of members.

(a) A person becomes a member and may be suspended, dismissed, or expelled in accordance with the association's governing principles. If there are no applicable governing principles, a person may become a member or be suspended, dismissed, or expelled from an association only by a vote of its members. A person may not be admitted as a member without the person's consent.

(b) Unless the governing principles provide otherwise, the suspension, dismissal, or expulsion of a member does not relieve the member from any unpaid capital contribution, dues, assessments, fees, or other obligation incurred or commitment made by the member before the suspension, dismissal, or expulsion.

§ 4-28-620 Member's resignation.

(a) A member may resign as a member in accordance with the governing principles. In the absence of applicable governing principles, a member may resign at any time.

(b) Unless the governing principles provide otherwise, resignation of a member does not relieve the member from any unpaid capital contribution, dues, assessments, fees, or other obligation incurred or commitment made by the member before resignation.

§ 4-28-621 Membership interest not transferable.

Except as otherwise provided in the governing principles, a member's interest or any right under the governing principles is not transferable.

§ 4-28-622 Selection of managers; Management rights of managers.

Except as otherwise provided in this subchapter or the governing principles:

(1) only the members may select a manager or managers;

(2) a manager may be a member or a nonmember;

(3) if a manager is not selected, all members are managers;

(4) each manager has equal rights in the management and conduct of the association's activities;

(5) all matters relating to the association's activities are decided by its managers except for matters reserved for approval by members in § 4-28-616; and

(6) a difference among managers is decided by a majority of the managers.

§ 4-28-623 Duties of managers.

(a) A manager owes to the unincorporated nonprofit association and to its members the fiduciary duties of loyalty and care.

(b) A manager shall manage the unincorporated nonprofit association in good faith, in a manner the manager reasonably believes to be in the best interests of the association, and with such care, including reasonable inquiry, as a prudent person would reasonably exercise in a similar position and under similar circumstances. A manager may rely in good faith upon any opinion, report, statement, or other information provided by another person that the manager reasonably believes is a competent and reliable source for the information.

(c) After full disclosure of all material facts, a specific act or transaction that would otherwise violate the duty of loyalty by a manager may be authorized or ratified by a majority of the members that are not interested directly or indirectly in the act or transaction.

(d) A manager that makes a business judgment in good faith satisfies the duties specified in subsection

(a) if the manager:

(1) is not interested, directly or indirectly, in the subject of the business judgment and is otherwise able to exercise independent judgment;

(2) is informed with respect to the subject of the business judgment to the extent the manager reasonably believes to be appropriate under the circumstances; and

(3) believes that the business judgment is in the best interests of the unincorporated nonprofit association and in accordance with its purposes.

(e) The governing principles in a record may limit or eliminate the liability of a manager to the unincorporated nonprofit association or its members for damages for any action taken, or for failure to take any action, as a manager, except liability for:

(1) the amount of financial benefit improperly received by a manager;

(2) an intentional infliction of harm on the association or one or more of its members;

(3) an intentional violation of criminal law;

(4) breach of the duty of loyalty; or

(5) improper distributions.

§ 4-28-624 Notice and quorum requirements for meetings of managers.

Notice and quorum requirements for meetings of managers and the conduct of meetings of managers are determined by the governing principles.

§ 4-28-625 Right of member or manager to information.

(a) On reasonable notice, a member or manager of an unincorporated nonprofit association may inspect and copy during the unincorporated nonprofit association's regular operating hours, at a reasonable location specified by the association, any record maintained by the association regarding its activities, financial condition, and other circumstances, to the extent the information is material to the member's or manager's rights and duties under the governing principles.

(b) An unincorporated nonprofit association may impose reasonable restrictions on access to and use of information to be furnished under this section, including designating the information confidential and imposing obligations of nondisclosure and safeguarding on the recipient.

(c) An unincorporated nonprofit association may charge a person that makes a demand under this section reasonable copying costs, limited to the costs of labor and materials.

(d) A former member or manager is entitled to information to which the member or manager was entitled while a member or manager if the information pertains to the period during which the person was a member or manager, the former member or manager seeks the information in good faith, and the former member or manager satisfies subsections (a) through (c) of this section.

(e) This section shall not affect a record or information that may be accessed by the public under the Freedom of Information Act of 1967, § 25-19-101 et seq.

§ 4-28-626 Distributions prohibited; Compensation and other permitted payments.

(a) Except as otherwise provided in subsection (b), an unincorporated nonprofit association may not pay dividends or make distributions to a member or manager.

(b) An unincorporated nonprofit association may:

(1) pay reasonable compensation or reimburse reasonable expenses to a member or manager for services rendered;

(2) confer benefits on a member or manager in conformity with its nonprofit purposes;

(3) repurchase a membership and repay a capital contribution made by a member to the extent authorized by its governing principles; or

(4) make distributions of property to members upon winding up and termination to the extent permitted by § 4-28-629.

§ 4-28-627 Reimbursement; Indemnification; Advancement of expenses.

(a) Except as otherwise provided in the governing principles, an unincorporated nonprofit association shall reimburse a member or manager for authorized expenses reasonably incurred in the course of the member's or manager's activities on behalf of the association.

(b) An unincorporated nonprofit association may indemnify a member or manager for any debt, obligation, or other liability incurred in the course of the member's or manager's activities on behalf of the association if the person seeking indemnification has complied with §§ 4-28-618 and 4-28-623. Governing principles in a record may broaden or limit indemnification.

(c) If a person is made or threatened to be made a party in an action based on that person's activities on behalf of an unincorporated nonprofit association and the person makes a request in a record to the association, a majority of the disinterested managers may approve in a record advance payment, or reimbursement, by the association, of all or a part of the reasonable expenses, including attorney's fees and costs, incurred by the person before the final disposition of the proceeding. To be entitled to an advance payment or reimbursement, the person must state in a record that the person has a good faith belief that the criteria for indemnification in subsection (b) have been satisfied and that the person will repay the amounts advanced or reimbursed if the criteria for payment have not been satisfied. The governing principles in a record may broaden or limit the advance payments or reimbursements.

(d) An unincorporated nonprofit association may purchase insurance on behalf of a member or manager for liability asserted against or incurred by the member or manager in the capacity of a member or manager, whether or not the association has authority under this subchapter to reimburse, indemnify, or advance expenses to the member or manager against the liability.

(e) The rights of reimbursement, indemnification, and advancement of expenses under this section apply to a former member or manager for an activity undertaken on behalf of the unincorporated nonprofit association while a member or manager.

§ 4-28-628 Dissolution.

(a) An unincorporated nonprofit association may be dissolved as follows:

(1) if the governing principles provide a time or method for dissolution, at that time or by that method;

(2) if the governing principles do not provide a time or method for dissolution, upon approval by the members;

(3) if no member can be located and the association's operations have been discontinued for at least three years, by the managers or, if the association has no current manager, by its last manager;

(4) by court order; or

(5) under law other than this subchapter.

(b) After dissolution, an unincorporated nonprofit association continues in existence until its activities have been wound up and it is terminated pursuant to § 4-28-629.

§ 4-28-629 Winding up and termination.

Winding up and termination of an unincorporated nonprofit association must proceed in accordance with the following rules:

(1) All known debts and liabilities must be paid or adequately provided for.

(2) Any property subject to a condition requiring return to the person designated by the donor must be transferred to that person.

(3) Any property subject to a trust must be distributed in accordance with the trust agreement.

(4) Any remaining property must be distributed as follows:

(A) as required by law other than this subchapter that requires assets of an association to be distributed to another person with similar nonprofit purposes;

(B) in accordance with the association's governing principles or in the absence of applicable governing principles, to the members of the association per capita or as the members direct; or

§ 4-28-630 Mergers.

(a) In this section:

(1) “Constituent organization” means an organization that is merged with one or more other organizations including the surviving organization.

(2) “Nonsurviving organization” means a constituent organization that is not the surviving organization.

(3) “Organization” means an unincorporated nonprofit association, a general partnership, including a limited liability partnership, limited partnership, including a limited liability limited partnership, limited liability company, business or statutory trust, corporation, or any other legal or commercial entity having a statute governing its formation and operation. The term includes a for-profit or nonprofit organization.

(4) “Surviving organization” means an organization into which one or more other organizations are merged.

(b) An unincorporated nonprofit association may merge with any organization that is authorized by law to merge with an unincorporated nonprofit association.

(1) Each constituent organization shall comply with its governing law.

(2) Each party to the merger shall approve a plan of merger. The plan, which must be in a record, must include the following provisions:

(A) the name and form of each organization that is a party to the merger;

(B) the name and form of the surviving organization and, if the surviving organization is to be created by the merger, a statement to that effect;

(C) if the surviving organization is to be created by the merger, the surviving organization's organizational documents that are proposed to be in a record;

(D) if the surviving organization is not to be created by the merger, any amendments to be made by the merger to the surviving organization's organizational documents that are, or are proposed to be, in a record; and

(E) the terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration except that the plan of merger may not permit members of an unincorporated nonprofit association to receive merger consideration if a distribution of such consideration would not be permitted in the absence of a merger under §§ 4-28-626 and 4-28-629.

(3) The plan of merger must be approved by the members of each unincorporated nonprofit association that is a constituent organization in the merger. If a plan of merger would impose personal liability for an obligation of a constituent or surviving organization on a member of an association that is a party to the merger, the plan may not take effect unless it is approved in a record by the member.

(4) Subject to the contractual rights of third parties, after a plan of merger is approved and at any time before the merger is effective, a constituent organization may amend the plan or abandon the merger as provided in the plan, or except as otherwise prohibited in the plan, with the same consent as was required to approve the plan.

(5) Following approval of the plan, a merger under this section is effective:

(A) if a constituent organization is required to give notice to or obtain the approval of a governmental agency or officer in order to be a party to a merger, when the notice has been given and the approval has been obtained; and

(B) if the surviving organization:

(i) is an unincorporated nonprofit association, as specified in the plan of merger and upon compliance by any constituent organization that is not an association with any requirements, including any required filings in the office of the Secretary of State, of the organization's governing statute; or

(ii) is not an unincorporated nonprofit association, as provided by the statute governing the surviving organization.

(d) When a merger becomes effective:

(1) the surviving organization continues or comes into existence;

(2) each constituent organization that merges into the surviving organization ceases to exist as a separate entity;

(3) all property owned by each constituent organization that ceases to exist vests in the surviving organization;

(4) all debts, obligations, or other liabilities of each nonsurviving organization continue as debts, obligations, or other liabilities of the surviving organization;

(5) an action or proceeding pending by or against any nonsurviving organization may be continued as if the merger had not occurred;

(6) except as prohibited by law other than this subchapter, all of the rights, privileges, immunities, powers, and purposes of each constituent organization that ceases to exist vest in the surviving organization;

(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

(8) the merger does not affect the personal liability, if any, of a member or manager of a constituent organization for a debt, obligation, or other liability incurred before the merger is effective; and

(9) a surviving organization that is not organized in this state is subject to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state for the debt, obligation, or other liability.

(e) Property held for a charitable purpose under the law of this state by a constituent organization immediately before a merger under this section becomes effective may not, as a result of the merger, be diverted from the objects for which it was given, unless, to the extent required by or pursuant to the law of this state concerning cy pres or other law dealing with nondiversion of charitable assets, the organization obtains an appropriate order of the Pulaski County Circuit Court specifying the disposition of the property.

(f) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to a nonsurviving organization and that takes effect or remains payable after the merger inures to the surviving organization. A trust obligation that would govern property if transferred to the nonsurviving organization applies to property that is transferred to the surviving organization under this section.

§ 4-28-631 Transition concerning real and personal property.

(a) If, before January 1, 2012, an interest in property was by terms of a transfer purportedly transferred to an unincorporated nonprofit association but under the law of this state the interest did not vest in the association, or in one or more persons on behalf of his or her association under subsection (b) on January 1, 2012, the interest vests in the association, unless the parties to the transfer have treated the transfer as ineffective.

(b) If before January 1, 2012, an interest in property was by terms of a transfer purportedly transferred to an unincorporated nonprofit association but the interest was vested in one or more persons to hold the interest for members of the association, on or after January 1, 2012, the persons, or their successors in interest, may transfer the interest to the association in its name, or the association may require the interest be transferred to it in its name.

§ 4-28-632 Uniformity of application and construction.

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

§ 4-28-633 Relation to Electronic Signatures in Global and National Commerce Act.

This subchapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001, et seq., but does not modify, limit, or supersede section 101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices described in section 103(b) of that act, 15 U.S.C. § 7003(b).

§ 4-28-634 Savings clause.

This subchapter does not affect an action or proceeding commenced or right accrued before this subchapter takes effect.

§ 4-28-635 Reserved

[Reserved]

§ 4-28-636 Effective date.

This subchapter takes effect January 1, 2012.

General information, not legal advice. Statutory text is reproduced from the official Arkansas source and may not reflect the most recent amendments.

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